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Decline in North American sentiment drags down investor confidence index in Jan

THE Global Investor Confidence Index (ICI) decreased to 108.8 in January, down 1.7 points from December, dragged down by a decline in sentiment in North America, according to the State Street Investor Confidence Index.

The Asian ICI fell 1.5 points to 102.9, while the North American ICI dropped from 110.5 to 108.8, and the European ICI slid 0.1 point to 103.4.

The index measures investor confidence or risk appetite by analysing buying and selling patterns of institutional investors. A reading of 100 is neutral and indicates the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets.

"We have seen an unprecedented slide in stock markets around the globe," said Jessica Donohue, executive vice-president at State Street Global Exchange. "Tumbling oil prices, a reaction to slowing demand in the face of a supply glut, and changing growth dynamics in China chipped away at investors' confidence over the past month."

"Fears around weakening Chinese growth and the collapse in oil markets have caused institutional investors to believe the additional spending released into the hands of consumers in non-commodity producing countries makes even this steep and sudden downdraft a buying opportunity," added Ken Froot, founding partner at State Street Associates. "Perhaps 2016 will be a happy new year after all."